CHAOS CON­TIN­UES IN THE CO­COA LANDS

The Africa Report - - LETTERS -

West Africa’s co­coa sec­tor was badly af­fected by last sea­son’s El Niño [‘Agribusi­ness: Cracks show af­ter the drought’, TAR87 Feb 2017]. This has driven co­coa prices on a roller-coaster run, ris­ing to record lev­els in mid-2016 as sup­plies fal­tered, then caus­ing a glut that drove prices back down to their low­est level in three years. West Africa’s co­coa grinders were also badly af­fected by El Niño, which forced many smaller grinders to sus­pend op­er­a­tions be­cause they were un­able to source beans. As a re­sult, Côte d’ivoire lost its po­si­tion as the world’s largest grinder to the Nether­lands. While the re­bound in pro­duc­tion this sea­son and the fall in prices should ben­e­fit lo­cal grinders, it is caus­ing fresh prob­lems for West African ex­porters. The larger ex­porters are loath to buy beans at the high fixed price, re­sult­ing in beans pil­ing up at ports, while many small traders in Côte d’ivoire have been badly ex­posed by the dra­matic price fall, forc­ing them to re­nege on an es­ti­mated 100,000tn of ex­port con­tracts. The Ivo­rian co­coa reg­u­la­tor (CCC) has an­nounced plans to re­sell these con­tracts on the mar­ket, but this could drive down prices fur­ther if co­coa sup­plies flood the mar­ket. Ed­ward Ge­orge Head of Group Re­search, Ecobank

Newspapers in English

Newspapers from Botswana

© PressReader. All rights reserved.